Discover more from Finding Outperformers, by Aditya Grover
Key learnings & takeaways
As we complete 6 months, thankyou for being super supportive!
It’s been 6 months now since we have been posting here on substack and the feeling is great! The frequency of blogs might have reduced a bit in recent months due to other commitments on the professional front, but have ensured that the flow is maintained and to get back on track with more blogs in the coming future. Thank you for being supportive and regularly checking out our content, you motivate us!
Here are 6 learnings we wanted to share as we continue posting our research on 'Finding Outperformers'-
1. While deciding where to invest your money, the more you think of a stock or something that hits your mind again & again, the more will be your tendency to invest in that. It's hard to control that bias. Rather approach it in a different way, think of why you shouldn't invest in it. After all, investing is more about saving goals than doing goals. And where it's hard to find negatives, maybe you got something actually interesting?
2. You won't be right 50% of the time or even more. Accept that and move on. Even the Big Short investor Michael Burry this week tweeted that he was wrong on his latest call to 'Sell' the market. Review your investment hypothesis and dig deeper into what went wrong and whether there is a genuine reason for the fall? If you still think you are right and logical, take your call, but don't be ignorant about it!
3. Momentum is king! More money can be made by holding on to your winners. Markets have a tendency to ignore great companies for a long and undervalue the potential they hold. Once the market starts to value them correctly, don't be in a hurry to sell them, rather ride the momentum along continuing to research more about it. Have some patience, the coming reward can be much bigger.
4. Your investment ideas are not unique. The root cause of overconfidence comes when you believe more in your ability to think of something extraordinary. If you come across a stock that is highly undervalued as per your analysis, don't trigger your gun the very next day by investing in it. Spend some more time, maybe a few weeks or even a few months understanding the company better. Idea is to avoid mistakes that humans commit in a hurry & overconfidence.
5. Active investing can be stressful sometimes. Take the example of the market fall of December'22 due the to Covid scare, or in the last 3 months where markets have been down 5 to 7%. Equity as an asset class tests your patience. People might come to you saying they earning a healthy 8% without risk via FDs, nothing bad though, but the equity asset class can comfortably beat that 8% FDs in long run!
6. When investing in mid and small-caps, spend extra time understanding the management. In small and growing organizations, key professionals play a major role (more than in larger companies) in driving value for their shareholders. Understand their vision, their strategy, their background & past work. Search for them on YouTube. Would these people work smartly & faithfully to help your money grow? if yes, go ahead!
We know all points above are easier said than done, but have faith in your journey, good things are coming ahead for you! 🚀
And lastly, the next blog post is coming out on Nazara tech where we continue to deep dive into why we still believe in our investment despite recent corrections since the previous blog on Nazara.
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Personal & client investment/interest in the shares exist(sometimes as high as 10% of portfolio); this isn’t an investment advice; DYOR (do your own research) is recommended; Investing & trading are subject to market risk; the Decision maker is responsible for any outcome